Japan and Hong Kong Lose Crypto Exchanges
Asia has not been too kind towards exchange platforms of digital currencies as they have levied extreme regulations on the crypto space. Even though some countries look positive on cryptocurrencies, their tough regulative stances are making it impossible for new businesses to flourish. As of now, three of the biggest crypto exchanges have announced their decision to quit operations in Japan and Hong Kong.
In April, Kraken, a San Francisco-based exchange declared that it would cease its operations in Japan. The residents of the country won’t be able to avail its services in one of the biggest crypto markets of the world. The company will be closing its services around the middle of June 2018. The clients are expected to settle their deals before the closure to avoid any uncomfortable situation.
The official statement of the crypto firm read, “Suspending services for Japan residents will allow us to better focus on our resources to improve in other geographical areas. After we have had a chance to better catch up to our rapid growth, we will consider the possibility of resuming service for Japan residents.”
The company entered the market in October 2014, but it now believes that it has become impossible to continue a profitable business in Japan. Kraken’s decision comes after long research over company’s income against expense plus the cost to maintain assets in Japan.
However, it should be noted that income is not the only reason for world’s thirteenth biggest trader to quit Japan. The new regulations employed by the regulatory authorities are the main cause for exchange’s inconvenience.
One of the fundamental reasons for Japan to regulate the market is the $530 million heist which occurred in Coincheck. The trading platform was later purchased by Monex group for $33 million. As a surprise, the company declared a $491 million profit even after paying 47.3 billion yen ($432) to its former clients.
But, Japanese regulators continued their assault over the industry which forced exchanges to create a self-administrative body to re-instill faith in investors. Although Coincheck’s profit shows a growth in the market yet operating an exchange amidst heavy regulations is more difficult than ever.
In similar news, Binance, one of the prominent crypto exchanges of the world, is shifting its operations from Hong Kong to Malta. The decision has been taken after realizing the stringent crypto regulations in Hong Kong and more liberal working space in the small nation Malta, in the Mediterranean Sea south of Sicily and North of Libya.
China has been fiercely closing crypto related businesses in the country while Securities and Futures Commission Hong Kong has already issued an order to trades to stop endorsements. Binance was among the receivers of the letter which made the crypto firm re-think its framework in China.
If the Asian controllers do not opt a progressive outlook towards the crypto community, many more exchanges will be switching locations. Most of the advanced countries are coming up with regulations that can create a healthy environment for digital currencies. It is time that Asian countries change their perspectives a little to accept a change in the changing world.